Pemex receives two-year extension on blocks

MEXICO CITY, August 29, 2017 – Mexico’s state-owned Pemex has been given a two-year licence extension on 65 exploration blocks containing 68% of its prospective resources, the Secretariat of Energy (SENER) announced Monday.

Pemex was awarded a total of 108 exploration licences and 286 extraction licences in the Round 0 process that took place in 2014. The acreage that the NOC received contains 83% of Mexico’s 2P reserves and 21% of its 3P reserves.

Included in the agreements for these licence areas was a provision stating that if the company did not invest in the blocks within a three-year period ending August 27, 2017, then they could be relinquished back to the state.

Due to its looming financial troubles and a reduced exploration budget, Pemex was unable to invest in many of these blocks. According to a press release, after conducting an analysis of Pemex’s investments, SENER determined that the NOC had met 100% of its obligations in 36 areas and “partially met activity goals” in 65 blocks.

To garner the necessary investment to explore and develop some of these blocks, Pemex will farm out shares to more experienced and financially stable companies in competitive tenders.

The NOC’s first farm-out, Trion, saw BHP Billiton come on board in December 2016. The Ayin-Batsil, Ogarrio and Cárdenas Mora fields are scheduled for farm-out tenders on October 4, and the Maximino-Nobilis area is expected to be auctioned later in 2017.

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